BODY: It's racial politics for the 90's - not Old South race baiting, but a post-civil-rights-era assault on welfare abuse and programs like affirmative action that his audience sees as helping blacks while hurting whites.

''I'm not a racist like Jesse Jackson,'' David Duke said recently, peering into the Cajun country blue-collar crowd of perhaps 200 people at the American Legion hall here. ''I'm proud of my heritage like Jesse Jackson is proud of his. But I believe the time has come for equal rights for everyone in this country, even for white people.''

Many in the crowd wear blue and white David Duke T-shirts or baseball caps, and they give their approval in a low rumble of ''Duke, Duke, Duke, Duke,'' a response that has made the roadshow of the former Ku Klux Klan leader the talk of Louisiana. A year after his surprise election to the Louisiana House of Representatives, Mr. Duke has made himself a potent force in state politics, polarizing the Legislature along racial lines, gathering a fervent statewide following and mounting an unexpectedly strong bid for the United States Senate seat held by J. Bennett Johnston.

Despite the enthusiastic crowds, analysts say there is little chance he can win the Senate race this fall. But Mr. Duke, a Republican, is threatening to elbow the party's nominee, State Senator Ben Bagert, out of the race, and he is angling to force Mr. Johnston, an 18-year incumbent, into an embarrassing runoff. If he does, some critics say, he will achieve his goal of helping to build a national white supremacist movement.

''This is not really about Bennett Johnston or Ben Bagert,'' said Dr. Lawrence Powell, a Tulane University historian. ''It's about politics for the next 10 years.''

Mr. Duke's campaign, which was helped in May when the Louisiana House of Representatives overwhelmingly approved his bill opposing affirmative action, is partly a product of the frustrations generated by Louisiana's depressed economy and partly in keeping with the state's tradition of eccentric politicians, from Huey and Earl Long to Edwin Edwards.

It is aided by the state's unusual system in which all candidates from all parties, whether party nominees or not, run in the Oct. 6 primary. If no candidate gets 50 percent of the vote, the two top finishers face each other on Election Day. If one gets 50 percent, there is no general election. So far, Mr. Johnston, Mr. Bagert and Mr. Duke are the only contenders, although a black state legislator, Willie Singleton, says he might enter the race.

'A Mouth That's Different'

But Mr. Duke's campaign, with its focus on issues like affirmative action, government programs that set aside a certain number of contracts for minority businesses and what he calls ''the rising welfare underclass,'' is speaking to white resentments and explosive racial issues that resonate far beyond the state's borders. He is most popular with younger voters.

''Wherever I go, I find almost universal dislike for set-asides,'' said Gov. Buddy Roemer, a Democrat. ''I don't share that. But you can't come down here and say that Louisiana has a problem that's different than anyone else's. We have a mouth that's different, but not a problem.''

Mr. Duke's notoriety stems, for the most part, from his tenure as national grand wizard of the Knights of the Ku Klux Klan, and he has longstanding ties to far right and racist groups. He had little impact on the Legislature before the vote on his bill on affirmative action. But his views on race have brought him extraordinary visibility around the state. Some analysts say the vote was a sign that legislators believe he speaks for a powerful constituency.

Duke's Campaign

At the heart of the Duke campaign are gatherings like the one in this town of almost 10,000 people, with its white-columned, 19th century Main Street homes. Here people work in the oil industry, at local sugar-processing and carbon-black plants and in agriculture and fishing.

The fare at this gathering was Budweiser, Coke and potato chips; the contributions were stuffed in a plastic cup or exchanged for $10 Duke T-shirts or $3 Duke earrings, and the oratory was intensely personal and suffused with primal racial images.

When Mr. Duke talked about the death penalty, he placed it in the context of someone murdering his two daughters. When he talked about economic hardship, he spoke of those in the all-white crowd who cannot afford to rear children.

On the other hand, the abuses of welfare were summed up by women who receive benefits and have ''one, two, three, four, ten, fifteen, twenty'' children. Minority contracting requirements were symbolized by a black state legislator's driving a Mercedes and allegedly getting contracts while a white person in a pickup truck was frozen out.

Even the furor over his affirmative action bill had an oversized target.

''Ladies and gentlemen,'' said Mr. Duke, who has the lanky good looks of a former athlete, ''the only reason why we have problems is because the black caucus didn't get their way like they usually do. It's about time they weren't given their way.''

Where Frustrations Blend

In southern Louisiana, where the economy has been depressed since the oil industry doldrums began in the mid-1980's, economic and racial frustration tend to blend.

''He's against welfare,'' said Pierre Dupuis, a retiree who speaks in the melodic Cajun accent of the bayou country here. Using a racial slur, Mr. Dupuis complained that tax money goes to black people, ''with their big radios on the street, and they're laughing at us.''

But more common than slurs against blacks is a sense that white people are being victimized by affirmative action and the minority contracting programs. It is the centerpiece of Mr. Duke's speech and perhaps his most effective issue with voters.

''We don't have the same rights as black people,'' said Jay Louviere, a 29-year-old lumberyard worker. ''Duke's the only one standing up for white people.''

But critics say that the issue has more basis in emotion than economics, that programs like affirmative action evoke particular resentment from white people facing their own economic problems.

Furor Over Affirmative Action

''I don't think there are 500 people in Louisiana that have either been adversely affected or benefited by affirmative action,'' said Mr. Edwards, the former Governor. ''But everyone who doesn't have a job or whose son cannot get into law school believes it's because of affirmative action.''

Real or not, it taps into a powerful vein of anger that can seem the ultimate extension of the politics of sex and ethnicity.

''I believe there's a climate in this country that has become anti-Euro-American,'' said Emile Vidrine, a campus minister at the University of Southwestern Louisiana who is spending his summer working as a volunteer for the Duke campaign. ''I'm not putting anyone else down, but we have to put a stop to this idea that we can't stand up tall and say the European white man is one of the great races in the world.''

Mr. Duke's campaign exists in a complex relationship with his nearly lifelong involvement with white supremacist issues and groups. In an interview, he skirted issues he has espoused in the past, like genetic differences between white people and black people, and said his campaign was simply about equal rights for all.

''There are many liberals today who were radical leftists in their younger days,'' he said. ''I'm a conservative who might have been considered a radical rightist in my younger days.''

Links to Extremists

But Mr. Duke, who now heads a group called the National Association for the Advancement of White People, has maintained many links to other extremist groups. He used the subscriber list of the far-right publication The Spotlight for fund-raising, ran for President in 1988 as the candidate of the far-right Populist Party and as recently as a year ago sold Nazi and extremist books out of a building that includes his legislative office.

The Louisiana Coalition Against Racism and Nazism, a bitter critic of Mr. Duke, characterizes him as ''an extremist ideologue who uses the pool of new followers as a recruiting ground for a white supremacist and anti-Semitic movement.''

Much of his campaign depends on his ability to persuade voters that he is not a dangerous extremist, and critics say his campaign could falter if a fuller picture of his activities reaches voters.

At the same time, many supporters say his past ignites his campaign and separates him from other conservatives.

''His background is what gives the added emphasis to what he says,'' said Jim McPherson, a New Orleans lawyer and Duke supporter. ''It says he means business.''

Few Expect Him to Win

Experts say Mr. Duke must get 65 percent of whites' votes to win a race in a state in which black people make up 27 percent of the electorate. Few think he can do it.

But recent polls show him running second to Mr. Johnston, with the Senator by no means guaranteed the 50 percent he needs to avoid a runoff. Many analysts think Mr. Duke could get at least 30 percent of the statewide vote. Most see an extremely fluid race, saying Mr. Johnston's support is relatively soft, Mr. Duke has fervent supporters but unfavorable ratings from about half the electorate and Mr. Bagert is little-known and underfinanced. Mr. Johnston says Mr. Bagert should quit the race to reduce the chances of Mr. Duke's making a runoff. Mr. Bagert replied that as the only unknown quantity in the race, he is the only candidate with much potential to pick up more support.

To some observers, what is most disturbing about Mr. Duke's campaign is that frustrated and angry white people seem willing to forget his extremism while embracing his more mainstream views on racial issues.

''I think a lot of people are enchanted by the message and are disregarding the messenger,'' said State Representative Odon Bacque Jr., an independent. ''To me it's frightening. I believe if no one takes him seriously, he can end up winning.''

GRAPHIC: Photo: State Representative David Duke, a Republican who is campaigning for J. Bennett Johnston's Senate seat in Louisiana, signing a picture after a rally at an American Legion hall recently in Franklin. (Matt Anderson for The New York Times) (pg. A18)